Psychiatric Impairment Arising from COVID-19

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PSYCHIATRIC INJURIES

In response to the coronavirus, the government issued an order requiring all California residents to stay home, except for those workers deemed to be essential. As a result, employers were required fundamentally change their business practices.

Some laid off workers due to the uncertainty surrounding COVID-19. Some implemented new technology to allow employees to work from home. For businesses deemed to be essential, some instructed their employees to maintain physical distance from other employees or customers. Others required their employees to work different hours due to staggered shifts.

Although such efforts are necessary to protect employees and the community at large from the spread of COVID-19, they do not insulate employers from liability for injuries sustained as a result of such work. These efforts to control the coronavirus do not change the law on legal liability for injuries.

In California, Labor Code § 3208.3(a) provides, "A psychiatric injury shall be compensable if it is a mental disorder which causes disability or need for treatment." Because of COVID-19, employees are understandably going through a lot of stress. They may be stressed because they've lost their job or are in danger of losing their job. They may be stressed by changes in their working conditions in response to COVID-19. They may also be stressed as a result of fear from the coronavirus itself.

An employer is not legally liable for all of these stressors. If an employee alleges a psychiatric injury as a result of COVID-19, it will be up to the parties and doctors to parcel out the different causes of the injury, whether non-industrial or industrial, and determine whether those causes meet specified thresholds.

ACTUAL EVENT OF EMPLOYMENT

Labor Code § 3208.3(b)(1) states, "In order to establish that a psychiatric injury is compensable, an employee shall demonstrate by a preponderance of the evidence that actual events of employment were predominant as to all causes combined of the psychiatric injury." The phrase "predominant as to all causes" means more than 50 percent. On the other hand, the phrase “actual events of employment” does not provide clear guidance because it is susceptible of many meanings.

An employee's industrial physical injury constitutes an actual event of employment for the purposes of § 3208.3(b)(1). As discussed below, although there may be issues as to whether COVID-19 is a "physical injury" for the purposes of psychiatric impairment for the purposes of § 4660.1(c), there is little doubt that an employee who contracts COVID-19 would be allowed to obtain treatment for any psychiatric disorder predominantly caused by it. The issue becomes more difficult if an employee's psychiatric condition is caused by stress surrounding the coronavirus, rather than the coronavirus itself.

The courts have held that an employee's subjective misperception that the employment was stressful cannot support an award, because there must be an actual event of employment, and thus the employee must establish objective evidence of harassment, persecution, or other such basis for alleged psychiatric injury.

In Pacific Gas & Electric Co. v. Workers' Comp. Appeals Bd., the Court of Appeal explained that pursuant to § 3208.3(b)(1), there must be: (1) an "event"; i.e., it must be “something that takes place” in the employment relationship; and (2) the event must be “of employment”; i.e., it must arise out of an employee's working relationship with his or her employer. The Court concluded that "broad societal events or trends do not satisfy this requirement of section 3208.3 subdivision (b)(1) because they cannot reasonably be said to be events which arise out of the employment relationship."

In that case, the court determined generalized anxiety over one's future in a company struggling to survive during difficult economic times and fear of job loss due to management strategies to achieve increased profitabilty, such as “outsourcing” of jobs to an overseas workforce were not actual events of employment. It determined corporate downsizing, without more, cannot reasonably support an award of benefits, because "Allowing employees to recover benefits for psychiatric injuries caused by this type of stress would subject employers to virtually unlimited liability." The court determined that an employee's stock losses could nto support an award because the investment loss was no different from that experienced by the general investing public. It also determine an employee's concern over the future of his company and his retirement funds did not satisfy § 3208.3(b)(1).

However, the court concluded an employee's reassignment to a new position due to the employer's downsizing which required him to interact with irate customers could support an award. The court noted the evidence established the employee's confrontations with angry, threatening or deceitful customers packed in large numbers in a confining small office caused him specific and identifiable work-related stress. It found these stresses were a direct consequence of the new work assignment, an event of his particular employment, and a compensable cause of his psychic injury.

Application of Actual Event of Employment Requirement to COVID-19

Broad societal events or broad concerns over a company's struggle during difficult economic times do not qualify as “actual events of employment” pursuant to § 3208.3(b)(1). Accordingly, an employee's general concerns about his future and the future of the company due to the difficult economic times caused by coronavirus to not satisfy § 3208.3(b)(1). Likewise, corporate downsizing and the loss of value of an employee's company stock due to the coronavirus could not support an award.

However, changes in the workplace in response to the coronavirus which affect an employee could qualify. For example, actual events of employment could include:

1. A change of job assignment.
2. Changes in work duties or working conditions.
3. Stress related to the implementation of a new computer system.

Accordingly, while many employers were required to fundamentally change their business practices in order to comply with the government's stay at home and social distancing requirements, many of those changes could be considered actual events of employment. To the extent employees became anxious and stresses as a result of working form home, adapting to new technology, or having to change their job duties as a result of the coronavirus, they could potentially bring psychiatric claims.

This is not to say that employers shouldn't be making changes in response to COVID-19. They need to protect their employees from the coronavirus. However, employer must recognize that any change they make could support a claim for a psychiatric injury.

Should Employers Be Liable for Actions Mandated by the Government?

Employers may argue that they should not be held accountable for changes mandated by the government. In effect, employers are potentially being punished for their efforts to keep employees safe. However, so far, the appeals board has held that actual events of employment may include employment actions even if they are not attributable to the employer.

For example, in one case, an applicant-teacher was investigated by a grand jury for misappropriating funds raised by students. No charges were brought, and the applicant alleged she sustained a psychiatric injury. The appeals board concluded the grand jury investigation was an "actual event of employment" because it dealt with the accusations of wrongdoing in the school fundraising activities.

Similarly, in another case, an applicant was tried and acquitted of workers' compensation fraud. She filed another claim alleging injury to her psyche after the acquittal. The board concluded although her arrest and subsequent acquittal did not need to be attributable to management in order to be considered actual events of employment pursuant to § 3208.3(b)(1).

In both these cases, actions at issue were not attributable to the employer but were directly attributable to the government. However, the appeals board still concluded they satisfied § 3208.3(b)(1). Therefore, it is likely that the appeals board will conclude an employer's action taken in response to a government mandates or recommendations will qualify.

COULD COVID-19 BE A VIOLENT ACT?

Although § 3208.3(b)(1) requires actual events of employment to be the predominant cause in order for a psychiatric injury to be compensable, subdivision (b)(2) slightly reduces this threshold to a "substantial cause" if an employee's "injuries resulted from being a victim of a violent act or from direct exposure to a significant violent act." A "substantial cause" is defined as being "at least 35-40 percent of the causation from all sources combined." (Lab. Code, § 3208.3(b)(3).)

Doctors, nurses or other frontline workers who are required to treat COVID-19 patients could potentially argue that they were directly exposed to a violent act. Many news reports and politicians have used war as a metaphor for the COVID-19 crisis. Healthcare workers are being described as soldiers fighting against the coronavirus, many treating more patients than they can handle and many without the personal protective equipment they need.

However, it is unlikely their exposure to COVID-19 qualifies as direct exposure to a significant violent act. In Wilson v. State of CA Cal Fire, the appeals board en banc defined a "violent act" in the context of § 4660.1(c)(2)(A) as "an act that is characterized by either strong physical force, extreme or intense force, or an act that is vehemently or passionately threatening." The appeals board held that a firefighter who fought a wildfire for several hours, during which time he had prolonged exposure to fumes and smoke resulting in an adverse physical reaction in multiple body parts, did not sustain an injury that resulted from a violent act.

Given the threat in Wilson posed an more immediate threat, it is unlikely that a healthcare worker's prolonged exposure to COVID-19 patients would qualify as a violent act. Nevertheless, § 3208.3(b)(2) only slightly reduces the threshold for a psychiatric injury from greater than 50 percent to 35-40 percent. It is easy to imagine frontline healthcare workers developing post-traumatic stress disorder or other psychiatric conditions as a result of treating COVID-19 patient. The percentage of causation for a psychiatric injury is determined by medical doctors, it is difficult to imagine a situation where a doctor would find such workers did not meet the required threshold.

GOOD FAITH PERSONNEL ACTION

As discussed above, an employer could be required to